The mid-year 2026 reinsurance renewal for American Coastal Insurance Company (AmCoastal) is “effectively complete” its CEO Brad Martz has explained, with the top of the tower lifting to over $1.6bn, while the company has added more aggregate protection as well.
Then, at the January 2026 renewals, AmCoastal grew its all other perils cover slightly and also refreshed its catastrophe aggregate coverage at the same size as the prior year.
In addition, in February 2026 AmCoastal ventured into the catastrophe bond market, securing $200 million of multi-peril reinsurance from the capital markets from its Armor Re II Ltd. (Series 2026-1) issuance.
Following the announcement of its first-quarter 2026 results, AmCoastal’s CEO Brad Martz explained during an earnings call that the reinsurance renewal for June 1st is almost finalised.
Martz explained that reinsurance costs are moving in the right direction for the company, helping it to buy a larger reinsurance tower this year.
“I’m pleased to report that our June 1st 2026 core catastrophe reinsurance program is effectively complete and we are very pleased with the outcome,” Martz said.
Going on to state that, “The key takeaways are, first we were able to secure risk-adjusted reinsurance cost decreases that were necessary for us to remain both very competitive and profitable. Second, we increased our exhaustion point up to over $1.6 billion, expected to exceed the 250-year return time using the most recent version of Verisk’s hurricane model, including demand surge and a 10% load for loss adjustment expenses.”
On the frequency protection side, changes made at this mid-year renewal are expected to allow AmCoastal to non-renew one of its January purchases next year.
Martz explained, “Third, we have moved our lower layers to an all-perils basis that will allow us to non-renew the January 1st all other perils catastrophe reinsurance program next year, while maintaining robust protection against potential non-hurricane cat events.”
Adding, “Lastly, we have more aggregate protection against frequency and severity resulting from a potentially active hurricane season.”
The CEO said that the final retention figures and cost of the reinsurance renewals will be reported later.
“I want to personally thank our reinsurance partners for their incredible support and thoughtfulness as we keep moving forward together,” he commented on the earnings call.
Continuing to explain, “While the program excess of $50 million is essentially done, we are looking at various cost-benefit analyses of reducing likely second and third event retentions to ensure that we are remaining profitable in a three-loss scenario.
“That has been one of our primary goals, to make sure we can maintain underwriting profitability even with three full-retention events in Florida.”
Later Martz also said, “With reinsurance costs in-line or better than what we’re losing on the front-end with our rates, it will continue to allow us to compete very aggressively and maintain our best accounts.”
Martz went into more detail further on during the earnings call, highlighting a number of reasons why the renewal is considered a success for AmCoastal.
“We have more overall limit. That’s number one. Introducing some new cascading layers that, you know, work like a top and drop where it’s you’ve got a lot more vertical limit for a first event, yet a more aggregate limit for second and subsequent events, assuming those layers, you know, are not eroded. The increased protection for both frequency and severity is extending return times, you know, even higher year-over-year. We feel very good about it, whether you’re looking at it from a first event, a second, or a third event perspective,” he explained.
Adding that this equals, “More robust coverage, at a very attractive risk-adjusted rate decrease. Combined with, the third-biggest change is the movement to an all-perils tower away from a hurricane-only tower. Historically, we had separated the non-hurricane and the hurricane risk because of the noise and the volatility associated with our old discontinued personal lines business. We just have exceptional loss experience when it comes to the SCS, severe convective storm stuff. It made perfect sense for us to think about including the lower layers, placing the lower layers on an all perils basis.”
On what the changes mean structurally, as well as the potential savings to be made from being able to non-renew one of the aggregate covers, Martz feels AmCoastal is now better positions.
“We’re trying to drive simplicity and standardisation across the board with this risk transfer approach. We got a lot more overall limit out of our gross cat quota share as well. While we’re maintaining the 15% cession rate, with earned premiums going down in this part of the cycle, we are actually technically shrinking that reinsurance spend via the quota share. We view that as a positive. We’re very happy with where we landed this year.”
AmCoastal’s recent catastrophe bond sponsorship will be one factor in helping to lift the top of the reinsurance tower higher this year.
As we reported in our coverage of that cat bond, the effective attachment point for that $200 million of reinsurance was anticipated to be around the $1.43 billion level for a first-event.
